Hanson Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,872,000 on March 1, $1,248,000 on June 1, and $3,097,900 on December 31.
Hanson Company borrowed $1,194,400 on March 1 on a 5-year, 13% note to help finance construction of the building. In addition, the company had outstanding all year a 9%, 5-year, $2,060,100 note payable and an 10%, 4-year, $3,883,000 note payable. Compute avoidable interest for Hanson Company. Use the weighted-average interest rate for interest capitalization purposes.